He added: "That is another example of how this government is helping people who want to save, people who want to leave something to their children like their home, people who want to get on in life, people who do the right thing.

"Those two decisions are going to be enormously helpful."

The cap on social care costs, originally planned to be set at £75,000 and introduced in 2017, will now be introduced in 2016 at a level of £72,000.

This would only cover the cost of social care and people would still have to pay for accommodation and food - although some support will be provided.

Mr Osborne said the cap would protect people from "getting a disease in later life and having to sell their house" to pay bills.

For Labour, shadow minister for care and older people Liz Kendall said: "George Osborne is still failing older people and their families. Today's minor adjustments to the government's plan will still leave far too many selling their homes to pay for care."

She added that any cap above £50,000 would not "provide adequate protection" for people on low incomes.

Ms Kendall said: "We need a far bigger and bolder response to meet the needs of our ageing population: a genuinely integrated NHS and social care system which helps older people stay healthy and living independently in their own homes for as long as possible."